Tuesday 12 November 2019

Amazon scales up Accelerator for pvt labels

Amazon scales up Accelerator for pvt labelsDigbijay Mishra | TNN

Bengaluru: Amazon Accelerator, which helps create stealth private labels for small manufacturers along with supplying products for its own brands, is being scaled up in India after a pilot here, two people aware of the matter said.

The move comes even as the practice of selling own competing products by top e-tailers is under the government’s scanner.

Amazon India, which is pushing an array of its own brands like Symbol and Solimo across product segments, is reaching out to a select few sellers to be part of this programme. The e-tailer will provide data on what products and combinations (colour, size, etc) are being searched the most on its platform and manufacturers can tap into that demand.

Interestingly, according to the terms of the agreement, reviewed by TOI, Amazon will have an option to acquire these brands at a mutually agreed pre-decided price. One of the riders by Amazon is also that these brands cannot be sold on any other marketplace globally, unless Amazon has given a written permission to do so. One of the people mentioned earlier said, during the pilot, one of such brands that has emerged on Amazon is MyBlush — an apparel brand for plus-size women.

“It can be for manufacturers to try and build their own brands or even supply for the widening range of Amazon private labels. Not all sellers could do this before as they would not have access to the data and other necessary inputs that will come from Amazon. They (Amazon) have just started reaching to new sellers,” said a person aware of the matter.

Accelerator, if it manages to scale up and build a set of new brands, will add an interesting dynamic to the dominance of existing brands that typically have the lion’s share in their respective categories. For example, Amazon’s Symbol has aggressively expanded into the fashion category, offering products at a much cheaper price than established marquee brands in the same segment. Presto and Solimo, both Amazon brands, are expanding their bouquet of products in home and kitchen segments, which are cheaper than their competitors.

An Amazon India spokesperson did not reply to an e-mailed query by TOI.

“Amazon Accelerator is a unique brand-building programme designed for manufacturers like you to access the Amazon Private Brands flywheel, allowing you to leverage Amazon’s data insights & marketing services to deliver high quality, differentiated selection to customers,” Amazon told one of the merchants it has reached out to.

This will be what is being called a ‘Made for Amazon’ brand where the e-tailer will push these brands via inputs on deals and coupons activation, visibility on monthly events, detailed inputs on selection, category deep-dive, inventory management guidance, etc.

For all the services offered by Amazon, it will charge a programme fee, which is essentially 7% of the gross sales of the products made by the seller each month on Amazon. “Such programmes distort the neutrality of the platform. Sellers would be coerced to take up such a programme for survival without any liability of the platform,” said the All India Online Vendors Association (Aiova), which is a group of online sellers. While the private brand success story is yet to be proven here by e-tailers, healthy margins is one of the reasons making it attractive to e-commerce players.

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